POLYCAB - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.5

📊 Core Financials Analysis

Profitability

ROE: 21.4% and ROCE: 29.7% — excellent capital efficiency, well above industry norms.

EPS: ₹145 — strong earnings per share, reflecting robust bottom-line performance.

PAT Qtr: ₹568 Cr vs ₹731 Cr — a sequential dip, but YoY profit variation of 46.5% shows strong growth momentum.

Balance Sheet & Cash Flow

Debt-to-equity: 0.01 — virtually debt-free, a major strength.

Dividend Yield: 0.47% — modest, consistent with a growth-oriented strategy.

Cash flows are healthy, supported by strong operating margins and low leverage.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 51.4 Richly valued vs industry PE of 29.1

P/B Ratio ~11.5 High, but justified by premium ROE

PEG Ratio 1.58 Fair to slightly expensive

Intrinsic Value ₹6,600–₹6,900 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: Polycab India Ltd is India’s largest manufacturer of wires and cables, with a growing presence in fast-moving electrical goods (FMEG) like fans, lights, and switches.

Strengths

Dominant market share in B2B electrical infrastructure.

Expanding B2C footprint with strong brand recall.

Operational excellence and backward integration in copper and PVC.

Growth Drivers

Rising demand from real estate, infrastructure, and rural electrification.

Strategic push into premium FMEG segments.

Strong export growth and margin expansion.

📈 Technical & Sentiment Overview

RSI: 68.8 — nearing overbought zone, short-term caution advised.

MACD: 113 — bullish momentum, trend continuation likely.

DMA 50 & 200: Price above both — confirms strong uptrend.

Volume: Slightly below average — cooling off after recent rally.

FII/DII Holding: Both increased — institutional confidence rising.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹6,600–₹6,900 — near intrinsic value and DMA 50.

Holding Strategy

Ideal for long-term investors seeking exposure to India’s infrastructure and consumer electrification boom.

Price targets for FY27 range from ₹8,100 to ₹9,200 based on projected earnings

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Monitor quarterly results and FMEG segment growth.

Polycab is a high-quality compounder with strong fundamentals, low debt, and a clear growth roadmap. If you're building a portfolio of durable industrial leaders, this one deserves a top-tier spot. Let me know if you'd like to compare it with Havells or RR Kabel next.

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